FL home to be auctioned, owner owes $264K, similar house down the street sold for $138K in February

[Amerigo Vespucci]

Florida’s High-Speed Answer to a Foreclosure Mess
By GRETCHEN MORGENSON and GERALDINE FABRIKANT
Published: September 4, 2010

http://www.nytimes.com/2010/09/05/business/05house.html?_r=1

TEN days from now, a four-bedroom house on a cul-de-sac in Middleburg, Fla., is scheduled to be auctioned off at the Clay County courthouse, 25 miles south of Jacksonville.

A judge who recently took over their foreclosure case has ordered Rodney Waters; his fiancée, Terri Reese; and their four children to leave the home they bought in 2006.

Mr. Waters, a supervisor at a local packaging company and the family’s sole breadwinner, fell behind on his mortgage two years ago after his property taxes jumped unexpectedly. He now owes $264,000 on the house; a similar home down the street sold for $138,500 in February.

The predicament of the Waters-Reese family is common in Florida today. The state routinely sets new records for foreclosures — in the second quarter, 20.13 percent of its mortgages were delinquent or in foreclosure, a national high, according to the Mortgage Bankers Association. And with housing prices still in a free fall, almost half of all borrowers in Florida owe more on their mortgages than their properties are worth, says CoreLogic, a data firm.

While the Waters-Reese case may not be unusual in Florida, the coming auction of the home is still notable: it will be a result of the Florida Legislature’s new effort to cut the number of foreclosures inching their way through the state’s courts. Earlier this year, Florida earmarked $9.6 million to set up foreclosures-only courts across the state, staffed by retired judges. The goal of the program, which began in July, is to reduce the foreclosures backlog by 62 percent within a year.

No one disputes that foreclosures dominate Florida’s dockets and that something needs to be done to streamline a complex and emotionally wrenching process. But lawyers representing troubled borrowers contend that many of the retired judges called in from the sidelines to oversee these matters are so focused on cutting the caseload that they are unfairly favoring financial institutions at the expense of homeowners.

[madrchsod]

1. that`s a huge loss in property taxes....

[napi21]

2. How long has he owned that house?

I'm not slamming him, but is it possible he got tangled up in the insane run up of home prices WAY ABOVE their realistic value?

[Amerigo Vespucci]

4. Article says he bought it in 2006, but it doesn't specify the price

I know that when I first rented the Silicon Valley house I'm in now (three years ago), these small 1950s one-story 1 car garage homes were selling for a median price of $650-700K.

I've seen houses in the neighborhood go for the low $400Ks in recent days. Same houses...just three years post-bubble. A lot of people buy the homes, which are largely held together by termites, so they can level it and put a new home up on the lot.

[flvegan]

23. They paid $200,400. Mortgage is $206,000.00

Lis Pendens was filed in 2008.

[Bozita]

3. Banksters always win!

They've invested tons of money in the US political process. They're just getting what they paid for.

[Hoopla Phil]

5. The article indicates that the problems started when the property taxes went up sharply.

They probably bought too much house and never considered a big tax increase.

[SoCalDem]

7. and how many times they re-fied for money-out..n/t

[Hoopla Phil]

13. I doubt they qualified. Do you have any reason to believe this to be true?

It is likely that the bank will loose money on this deal. Yes, they'll attach the balance of the loss to the guys credit and hound him the rest of his life, but it is doubtful the bank will ever recover all the money they fronted for the purchase.

[flvegan]

25. Pls see my post #23.

[Bozita]

14. I'm most concerned with the judicial system in these cases.

From the NYT article in the OP:

"In spite of the conflicting evidence, Aaron Bowden, the retired judge overseeing the case, made a summary judgment on Aug. 3, ruling that the property should go back to AmTrust.

Mr. Bowden did not return phone calls seeking comment.

Chip Parker, managing partner at Parker & DuFresne in Jacksonville, which represents Mr. Waters, said: “The threshold issue in any foreclosure case is who has the right to foreclose. We presented evidence to the judge that Fannie Mae owns the note and mortgage, and yet the judge ignored this crucial evidence.”"

[Hoopla Phil]

16. That is disturbing. I recall seeing a number of foreclosures being booted though.

It seems that many banks that claimed to own the note could not produce the note. Those people now have a home, no payment, AND evidence to have any bad credit of non payment removed. They really did bank.

[Bozita]

22. Makes me wonder how many untroubled mtg payers are giving big bucks to ...

.... folks who canNOT produce the note.

I'm not talking about distressed homeowners.

Just sayin'

[SoCalDem]

6. My friend & her husband owed $335,000 on their house

it was foreclosed & sold 2 months later for 99,500.

[EFerrari]

9. This is happening all over the country -- when they sell at all. n/t

[SoCalDem]

10. and they begged for a little slack..for MONTHS

and the mortgage company just shined them on..

[dkf]

11. Isn't life better without their mortgage though?

[SoCalDem]

12. They divorced ( that was not the only reason)

and other than missing "her house", my friend is very relieved.

[Hoopla Phil]

15. The bank will attach the balance to their credit and it will follow them

the rest of their life.

[dkf]

18. I think it depends on the state.

Some have laws that discharge the debt with the foreclosure while others do not.

[Hoopla Phil]

20. I think it's 7 years federally. But, there are ways to refile and you can

also sell the debt to another company (within the same holding company as the one with the original debt) and it magically becomes "new" again. I've run into this problem personally.

[dkf]

26. From wikipedia...

http://en.m.wikipedia.org/wiki/Foreclosure?wasRedirected=true

If the mortgage is a non-recourse debt (which is often the case with owner-occupied residential mortgages in the U.S.), lender may not go after borrower's assets to recoup his losses. Lender's ability to pursue deficiency judgment may be restricted by state laws. In California and some other states, original mortgages (the ones taken out at the time of purchase) are typically non-recourse loans; however, refinanced loans and home equity lines of credit aren't.

[EFerrari]

24. At bottom, this is a land grab, imho.

There's nothing to stop the banksters.

[Rex]

8. Wall Street & Congress: sorry but you weren't big enough.

We only help big, big, big companies out of their financial whoas. The People get no such safeguard, thems the breaks...

[tsuki]

17. The people have to learn austerity. If they don't, how will the bankster get their big bonuses?

[Rex]

35. True, it takes a LOT of forclosers to get that 100 million in options

per year.

[BlueCheese]

19. What a frightening story. n/t

[Vickers]

21. Why did the property taxes go up so much? I live in Florida, and

the increases are capped at 3% annually.

Not sure how that applies if this is one of the dumbasses who refi'ed and refi'ed and refi'ed...not a lot of pity for those kitchen-decoratin' fools.

[flvegan]

27. 2006 taxes (when they closed): $509.84. 2007 taxes: $2718.24

They bought from the developer. Never saw this coming, sadly enough.

[Vickers]

29. I think the only way their taxes were that low the first year is if it was

only a fraction of a year.

I paid more taxes than that on my first Florida house in 1993 (house was worth $88,000, taxes were around $600).

[flvegan]

31. Tell you what sport

why don't you look it up like I did. BTW, I do this for a living. Right here in Florida.

You need a link at where to start?

[Vickers]

34. Why the name-calling, flvegan?

:shrug:

[flvegan]

37. What name-calling?

Don't be so sensitive.

Still need a link?

[Vickers]

38. Oh, was your use of "Sport" in a friendly manner?

My apologies!

:loveya:

[flvegan]

41. Look, if you don't like me calling you "sport"

I'm terribly sorry. Really, honestly I shouldn't have done so. You discounted what I posted so quickly...I thought it a respectful way to suggest you actually look it up.

[Vickers]

44. No problem...I just think that we can be (relatively) civil to each other

without resorting to childish name-calling.

Now, when we're dealing with repukes...that's a whole nuther ballgame.

[flvegan]

45. Agreed, and I was attempting to do so.

And don't get me started on dealing with repukes...

[Gaedel]

49. New house or homesteaded

Real estate sheet on a house shows existing taxes. If for a new house, these would be the value of the vacant lot or the 'teardown' that pre-existed there. For a resale, the owner may have been home-steaded at the lower rate. End of the first year the new owner lives there, taxes re-adjust based on the purchase price. I bought a new house in Florida in 2001. Very low taxes in Nov 2001. In Nov 2002, taxes jumped four-fold. He should have seen it coming.

[Riley18]

28. In Florida the Homestead tax cap does not take affect until after one year in

residence. They bought in 2006 when home prices were skyrocketing, and then once they were able to Homestead the property they were assessed at a much higher rate.

I think the main point of this article is that the banks now have the judicial system of Florida working as a clearinghouse for their land grab. According to the article, the "temporary" judges are simply pushing through on the foreclosures as quickly as the banks file. This may very well be ruled unconstitutional in the future.

The thing that confuses me is how the homeowners became the dumbassess when the banks made the bad loans in the first place. Also, as far as I could find in the article there never was any mention of any refinancing. Not sure why people seem to feel more comfortable blaming the people rather than the banks.

[Vickers]

30. I also didn't see in the article where they had refi'ed, but every person

that I *personally* know who has had problems like this has done multiple refi's (but they have nice kitchen counters!!!).

Anecdotal, true, but no more so than the linked story.

[flvegan]

32. Purchase money mortgage in 2006. No refi.

As stated in my post #23.

[Vickers]

36. He bought the house for 200k and now owes 264k, with no refi?

He needs a new calculator.

[flvegan]

39. Lis Pendens filed in 2008.

Two years of taxes, insurance, attorney fees and costs, interest...

What's that about a calculator now?

[Vickers]

40. Yup, looks like he's been in need of a calculator for going on 2 years now.

:rofl::rofl::rofl::rofl::rofl::rofl:

But wait...that would make his story about this sneaking up on him a load of bullshit, right?

:(

[flvegan]

42. You

don't know shit about real estate, this situation, or anything else in this matter.

Short of your geographic location, this topic eludes you.

Have a nice night.

[Vickers]

43. Sorry if the details are messing up a good sob story, flvegan!

:spank:

[Riley18]

48. Never answered my question as to why it makes you more comfortable in

theorizing that the homeowner is to blame in some way rather than the Bush Administration's deregulation of the banking industry.

Let me take a stab at why you feel better in blaming the victims....because any one of us could be in the same place depending on circumstances out of our control. How many families could remain in their home if they were to lose their main source of income? The idea that the homeowner brought this mess on through some greed or stupidity of his or her own is just more comfortable for some people. The reality is that it could happen to any working class family.

[Vickers]

33. OK, I looked it up (link below). He bought the house in 2006 for

200,400, and now owes (according to the story) $264,000, so he definitely refinanced for $64,000 more than he originally paid for the house.

http://www.qpublic.net/cgi-bin/clay_display.cgi?KEY=32-04-25-008101-050-22

Not sure if you can link directly to that page, but you can go here

http://www.ccpao.com/newsite/

and go through the menus and put the guy's name in (Waters Rodney).

[flvegan]

46. No refi, Vickers. Check out Official Records Book 3228, Page 1206

You'll get the breakdown from the Final Judgment. This is how shit just adds up.

[starroute]

47. The house across the street from me is in a situation like that

The owners didn't fight foreclosure, though -- they rented a big U-Haul truck a couple of weeks ago, loaded up all their stuff, and took off. Left two cars in the driveway and a bin of uncollected trash at the curb that they'd canceled the service to have picked up.

Apparently he'd lost his job some months ago and they'd just stopped making payments. My neighbor says they've gone to live with his mother in Jersey.

I've been curious enough to do some googling. Apparently in Pennsylvania, a foreclosed house is first put up for auction by the country sheriff -- but the bidding starts at the level of debt owed on it, and if nobody is willing to pay that much the bank gets stuck with it.

According to the county website, the debt on the place is about $237,000, but a website that lists foreclosures shows the current valuation as $160,000. And there are plenty of other houses for sale in town that are just sitting unsold, with the price dropping every couple of months. So I guess PNC gets stuck eating the difference.

The trash did finally get picked up after I (and probably a bunch of my neighbors) called the borough about it. But I have a real concern that the house is just going to sit empty for an indefinite period -- which is not something you want right across the street. Hopefully, the bank will at least be required by borough regs to keep the grass mowed.